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Demand for UK property at its highest for almost a year
Demand for property in May in the UK was at its highest level since September 2014 at a time when supply has seen a large fall year on year, according to estate agents. There were 383 house hunters registered on average per branch compared to 344 the previous month, according to the latest monthly report from the National Association of Estate Agents (NAEA). The report also records the highest year on year level of house buyers since May 2005 when 386 house hunters were recorded per branch. The data shows that the supply of housing has increased marginally from last month, with 46 houses up for sale per NAEA member branch in May, compared to 43 last month. And whilst demand for property is at similarly high levels to May 2005, supply has almost halved year on year over the 10 years, when 81 properties were available to buy. As supply and demand levels have risen, the number of sales per member branch has also risen slightly from last month. Some nine sales were agreed in May, compared to eight in April. Sales to first time buyers increased in May, jumping from 26% in April to 29% of sales in May. ‘There’s been a significant jump in the number of house hunters searching for properties this month, no doubt because the uncertainty of the market following the election has worn off and confidence has returned,’ said Mark Hayward, NAEA managing director. ‘However, supply does not meet the rise in demand, and as consumer confidence grows we will continue to see a widening of the property gap. The housing shortage will not be solved any time soon, so as pressure mounts we will no doubt see increases in house prices, making it harder for those stepping on or up the ladder,’ he added. Continue reading
Average UK prices up 1.4% in May, latest data shows
Average UK house price increased 5.6% annually and 1.4% on a monthly basis in May, taking the average home price to £212,495, according to the latest data to be released. In London the market is seeing significant growth again following reservations around the general election with prices up 16.7% year on year and 3.4% month on month to an average of £536,286. Sales in London have recorded their biggest monthly uplift since August 2014 and the monthly data report from haart estate agents also shows that in May there were 11 buyers chasing each available property across the country but this rises to 20 in London. Overall data from the firm has now shown a steady upward trajectory for UK property prices since November 2014, which has been driven by high levels of demand in relation to supply. Average first time buyer property prices across the UK are also on the increase, up 4.3% annually and 1.7% on the month. The number of new buyers registering has increased marginally on the month in May, up by 0.3% since April. However, the number of new buyer registrations is down 12.7% annually. But the firm says that given the particularly high levels of buyer activity in 2014, a fall in the number of new buyers is to be expected. The volume of new property instructions coming to the market has increased 2.6% on the month and haart says that this emphasises that sellers are feeling confident when it comes to putting their home on the market. There are now 11 buyers chasing each property for sale across the UK, which is a slight fall in activity levels on an annual and monthly basis but still shows that the market is busy, with consumer confidence high. The average loan advanced to a first-time buyer has increased 4.2% annually to just shy of £130,000 which the report says reflects strong institutional confidence in lending. As with the number of new buyer registrations, first time buyer registrations have fallen annually, which is a reflection of the strength of last year’s market. The data also shows that the North of London is the most expensive postcode area in which to buy with prices up 36% annually to an average £667,944. The North West is the only postcode area where the average property price is still less than £400,000. Paul Smith, chief executive officer of haart pointed out that with all this positivity in the air and continued low mortgage rates more people will aspire to buy, and without accompanying fresh supply property will become more unaffordable. ‘First time buyer activity in London is down significantly with 30% fewer first time buyer registrations in May 2015 compared to May 2014. The result will be that young professionals are driven from key areas as they can’t afford to live there,’ he said. ‘This is bad news for local economies and the UK as a whole and we need at least… Continue reading
Southern cities leading house price growth in the UK, latest index data suggests
UK house prices have increased by an average of £11,500 over the12 months to May 2015 with seven cities in the South of England significantly outperforming this level, the latest index shows. The average house in a city now costs £189,400 with London more than double this figure at £425,700, according to the data from residential property analyst Hometrack. The data also shows that on a month on month basis prices increased by 0.8% in May which is 3.8% above the peak of the market in 2007. Oxford has recorded the highest rise in the last 12 months with growth of £41,700, nearly quadruple the UK average of £11,500, followed by London at £38,900, Cambridge at £23,900, Bristol at £22,400, Southampton at £15,300, Bournemouth at £15,300 and Portsmouth at £15,000. Hometrack said that these house prices gains are a result of robust demand underpinned by the strength of these cities’ local economies and all 20 cities covered by the index recorded annual price rises. Those that saw the smallest rises were all in the north. In Liverpool prices increased by £4,200, Newcastle by £4,700 and Sheffield by £5,300 and these cities are still 14%, 8.5% and 3.8% respectively below their 2007. They are part of a group of nine cities in the north of England, Scotland and North Ireland that are recovering at a much slower pace due to weaker demand from house buyers. All cities except Aberdeen with a fall of 0.4%, recorded month on month price rises and Hometrack said that this could be partly due to a post-election bounce. Bristol led the way with a 1.3% increase followed by Cambridge, Leicester, Liverpool and Belfast all at 1.2%. ‘House prices have picked up momentum post-election. An increasing proportion of households are feeling the benefits of the improving economy, which means that house price growth is set to continue in the coming months. The greatest risk is an earlier than expected increase in interest rates which would knock market sentiment,’ said Richard Donnell, director of research at Hometrack. ‘The strong demand side recovery seen in southern England has yet to spread to other cities revealing the diverse nature of the housing market. All cities are making gains at different rates of growth, but the cities with the biggest increases all have something in common and that is strong local economies,’ he explained. He predicted that affordability pressures will bite at some point in the high value, high growth markets. ‘The double digit price growth registered in cities such as London, Oxford and Cambridge is being sustained by a lack of supply and below average transaction volumes with a third of sales funded by cash or buy to let mortgages,’ he pointed out. ‘London has the highest price to earnings ratio, but it covers a wide range of sub-markets. Over the last three years, the impetus for house price growth has shifted… Continue reading
